The inventory of widgets (a specific item of merchandise for resale) at the begi

Question

The inventory of widgets (a specific item of merchandise for resale) at the beginning of December consisted of 100 units costed at $2.00 per unit. Purchases of widgets during December were as follows:

Date Quantity Unit Cost Total

Dec 5 100 $1.00 $100.00

15 100 2.00 200.00

20 100 3.00 300.00

300 600.00

Based on a physical inventory immediately after the close of business on December 31, the ending inventory of widgets consited of 200 units.

1. How many widgets were sold during December?

2. Using LIFO, please compute the December book value of the ending inventory of widgets.

3. Using FIFO, please compute the December cost of widgets sold.

4. Using the weighted average method, please compute the costs of widgets sold.

Explanation / Answer

the widgets sold were 100+100+100+100+300 -200 =500 1> ans =500 units 2>book value of december inventory =100*1+100*2 =300$ 3>cost of widgets using FIFO =100*1+100*2+100*2+100*3+100*2 =1000$ 4>weighted average method is the method used to average the costs of inventory over a time period taking the averages of the sample = price avg =1400/700 =2$ so the cost of goods sold =2*500 =1000$ cheers :)

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